ISRAEL armed forces were engaged in an intense manhunt in the occupied West Bank last night after two 14-year-old Jewish settler boys were stoned to death and cast into a cave.

Amid fury in Israel, the prime minister, Ariel Sharon, condemned the killings as a "heinous murder" and said that it was "an additional escalation of Palestinian terror ... against civilians."

Tensions between the two sides rocketed anew, as the tentative hopes for a ceasefire were replaced by the prospect of a prolonged, worsening low-level war.

The Palestinian Authority expressed regret, but this did nothing to mitigate the anger in Israel or dampen the pressure from Mr Sharon's hard right for even tougher military measures against Yasser Arafat.

The Israeli army began throwing up new earth barriers and rounding up Palestinians - arresting at least 15 - in Arab villages close to Tekoa, the settlement where the boys lived, four miles south-west of Bethlehem.

Israel's Defence Minister, Benjamin Ben-Eliezer, vowed that the killers would be tracked down one by one. Their deaths came after a 48-year-old Brazilian-born settler near Nablus was shot dead on Tuesday by Palestinian guerrillas. Fears abound of an explosion of tit-for-tat sectarian violence between settlers and Palestinians in the occupied territories.

The killings came two days after a four-month-old Palestinian girl, Iman Hijo, was killed by an Israeli tank shell in the Gaza Strip. A senior Palestinian official and former Oslo negotiator, Saeb Erekat, expressed the PA's regret over the boys' death, saying "killing civilians is a crime, whether on the Palestinian or the Israeli side."

One of the dead boys, Ya'akov "Kobi" Mandell, was a US citizen from a religious family who recently moved to the occupied territories. The US ambassador to Israel Martin Indyk said it was a "vicious murder."

Israeli police investigators believe the boys were killed by Palestinians in what may have been a chance encounter. Tekoa residents said sheep had been stolen not far from the site of the killing. The boys had skipped school and spent the day about half a mile from their settlement, in an area dotted with caves.

Israel TV said police believed there were at least three assailants, who dipped their hands in the boys' blood after the killing and smeared it on the cave wall.

An anonymous caller to Reuters claimed responsibility for the boys killings in the name of an Islamic militant group, saying they were to avenge the death of the four-month baby and an Islamic Jihad militant on Saturday. The call could not be authenticated.

The brutal nature of the boys' killings have redoubled the pressure on Mr Sharon from his hard right. Yesterday they were in full voice.

Deputy Public Security Minister Gideon Ezra called for sweeping call-ups of reserve troops to beef up Israel's military presence in the occupied territories.

The outspoken Public Security Minister Avigdor Lieberman - who himself lives in one of the 145 Israeli settlements built in contravention to international law - said: "Day after day we see that we are up against a bunch of cannibals for whom nothing is sacred."

Meanwhile, in the Gaza Strip, there was more tragedy involving children: a three-month-old Palestinian baby and her mother were injured by shrapnel when Israeli tanks shelled the Rafah refugee camp. The baby had a piece of shrapnel lodged in her skull, doctors said.